Developing India’s Defence Industry

The time may have finally come for the government to embark on a strategic development of India’s private sector defence industry.

Traditionally Indian domestic defence production has been in the hands of public sector units. Given the sensitivity of their role, their performance has not been well scrutinised by the media and the public. But extending the poor performance of PSUs in other industrial sectors it may not come as a surprise that India’s domestic defence industry is able to produce weapon systems that the armed forces really need.

While privatisation of the defence industries may not be feasible or desirable, the government must embark on a phased private procurement programme – fixing a percentage of the defence procurement budget for the domestic industry. Domestic defence manufacturers must also be allowed to export weapons to other countries. To protect the national interest, the government can retain a veto over such export transactions.

There is plenty of evidence that India’s industry is capable of rising to the challenge given half-a-chance. It remains for the government to provide that half-chance.